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Section 2 - 1: Accountability Overview

This section summarizes the Local Government Financial Reporting System, vitally important statutory special district accountability requirements, and what will happen when special districts fail to comply with the requirements.

Through the passage of the Uniform Special District Accountability Act of 1989 (Chapter 189, Florida Statutes - Special Districts: General Provisions), as amended, the Florida Legislature deemed the following to be true:

Financial reporting is an essential requirement of law.
Special districts exist to serve a public purpose and must be held to certain minimum standards of accountability to keep the public, appropriate local general-purpose governments, and state agencies informed of their status and activities.
A function of the Special District Information Program is to improve communication and coordination among state agencies, local general-purpose governments, and special districts with respect to required special district reporting and state monitoring.
When special districts fail to comply with minimum disclosure requirements, state action must be taken to help noncomplying special districts come into compliance. If necessary, legal action must be taken to enforce compliance.

Local Government Financial Reporting System

The Local Government Financial Reporting System helps to provide for the timely, accurate, uniform, and cost-effective accumulation of financial and other information. Special districts, counties, municipalities, and state agencies have vital roles and responsibilities in this system. Members of the Legislature and other appropriate officials rely on the information this system produces to accomplish the following goals:

Enhance citizen participation in local government;
Improve the financial condition of local governments;
Provide essential government services in an efficient and effective manner; and
Improve decision-making on the part of the Legislature, state agencies, and local government officials on matters relating to local government.

Periodically, the Auditor General makes a performance audit of the system. Special districts must cooperate with the Auditor General during this process. The performance audit analyzes the system component by component and as a whole to evaluate its effectiveness in achieving system goals and objectives. It includes a determination of whether special districts are complying with statutorily required financial reporting requirements. The audit also makes recommendations to local governments and the Legislature about improving the system and reducing costs.

Vitally Important Statutorily Required Reporting

The Legislature has deemed the following reports to be so important that when special districts fail to file them, action can be taken to enforce compliance:

Reports and Information That Must Be Filed With State Agencies

Certain state agencies are responsible for reviewing, interpreting, and summarizing financial information for the public, the Legislature and other officials. Therefore, each special district must submit the following reports to state agencies, as applicable:

The Annual Financial Report (see Section 2 - 3: The Annual Financial Report)
The Annual Financial Audit Report (see Section 2 - 4: The Annual Financial Audit Report)
Bond related reports ( see Section 2 - 5: Bond Requirements)
Retirement system reports (see Section 2 - 6: Retirement Plans and Requirements)

Reports and Information That Must Be Filed With the Local General-Purpose Government(s) in which the Special District is Located

Local general-purpose governments need certain information to coordinate activities. Therefore, each special district must submit the following to each local general-purpose government in which it is located:

Public facilities reports (see Section 1 - 6: Comprehensive Planning and Public Facilities Reporting)
Designation of registered office and agent (see Section 1 - 4: Creating, Amending, Merging, and Dissolving Special Districts; Reviewing and Revising Rules - Designate a Registered Agent and Registered Office)
Regular public meeting schedule (see Section 3 - 2: Government-in-the-Sunshine - Regular Public Meeting Schedule)

Information That Must Be Filed With the Special District Information Program

Since the Special District Information Program must properly classify each special district and provide special district information to certain state agencies and all local general-purpose governments, each special district must file the following with the Special District Information Program (for all of the following, see Section 1 - 4: Creating, Amending, Merging, and Dissolving Special Districts; Reviewing and Revising Rules).

Creation document
Creation document amendments
From newly created special districts, a written statement referencing the basis for its independent or dependent status
Boundary map
Boundary map amendments

Consequences of Failure to Comply With Required Reporting

Annual Noncompliance Lists

Annually, the following state agencies provide a list of noncomplying special districts to the Department of Community Affairs for technical assistance and possible enforcement follow-up:

Department of Management Services, Division of Retirement - This report lists all special districts enrolled in state or local government retirement plans and those special districts that are not providing for regularly scheduled actuarial reports prepared and certified by an enrolled actuary.
Department of Financial Services - This report lists each special district that is required to submit an Annual Financial Report to the Department of Financial Servcies but failed to do so.
State Board of Administration, Division of Bond Finance - This report lists the special districts that did not timely provide the Advance Notice of Bond Sale and Bond Information Forms.
Auditor General - This report lists each special district that failed to submit an Annual Financial Audit Report, but should have submitted one based on its expenditures and revenues as reported to the Department of Financial Services on its Annual Financial Report.

Additionally, at any time, if a special district fails to file any report it is required to file with a local general-purpose government, the County Clerk of the Courts or the municipality designee must notify the special district's registered agent and approve a filing extension of up to 30 days. After that, if the local general-purpose government determines that an unjustified failure to file the reports has occurred, it may notify the Department of Community Affairs, which may proceed with technical assistance and enforcement.

When the Department of Community Affairs receives notice that a special district failed to comply with statutorily required reporting, the Special District Information Program will provide technical assistance, and if necessary, initiate enforcement.

Technical Assistance

In the case of a special district that did not timely file bond related reports or information, the Special District Information Program will send a certified letter to the special district that summarizes the requirements, and encourages it to take steps to prevent the noncompliance from reoccurring. For all other reporting requirements, it will attempt to assist the special district to comply by sending a certified letter to the special district's registered agent and a copy of the letter to the chair of the governing body of the local general-purpose government, which includes the following:

A description of the required report
Statutory submission deadlines
A contact telephone number for technical assistance
A 60-day extension of time for filing the required report
How to request an additional 30-day extension of time, if necessary
The address where the report must be filed
The consequences of failing to comply with the requirement

Enforcement

Failure of a special district to comply by the 60-day or additional 30-day extension of time will be deemed final action of the special district. The Legislative Auditing Committee will notify the Department of Community Affairs of those special districts that failed to file the required report. Within 30 days after receiving this notice or within 30 days after the extension date, whichever occurs later, the Department of Community Affairs must initiate one of the following actions:

Declare the Special District Inactive for Dissolution - If a special district is not filing a required report because it is no longer in operation (e.g., returned mail, telephone calls from the last registered agent or local governing authority, disconnected telephone lines, etc.), the Department of Community Affairs will declare the special district inactive for dissolution (see Section 1 - 4: Creating, Amending, Merging, and Dissolving Special Districts; Reviewing and Revising Rules).
Initiate Legal Action - Unless the special district documents that the notification from the Legislative Auditing Committee was issued as a result of material error (i.e., the notification said the report had not been filed, when in fact it had been filed), the Department of Community Affairs must initiate court proceedings, governed by the Rules of Appellate Procedure, as follows:
- The Department of Community Affairs will file a Petition for Writ of Certiorari in the circuit court (a writ that is issued when a governmental entity has not followed the essential requirements of law). This Petition will:
  - state the statutory citation that requires the filing of the report;
  - allege that the special district failed to file the report;
  - state that the Department of Community Affairs sent a technical assistance letter to the special district.
- The court will review the Petition to see if it is legally sufficient and issue an Order To Show Cause to the special district.
- The special district has a set period of time to respond to the Order to Show Cause. However, the only defense that can be raised by the special district is that the Legislative Auditing Committee's notice to the Department of Community Affairs contained a material error.
- The court then takes jurisdiction and issues a Writ of Certiorari to grant the affirmative relief that is required to accomplish the statutory requirement by ordering the special district to file the report. The only appeal from the court's order would be to the District Court of Appeal, and the only issue would be whether the circuit court judge acted in compliance with the law.
- As a part of this proceeding, the court shall award the prevailing party its attorney fees and costs. Thus, once the Department of Community Affairs files the Petition, it could get very expensive for the special district. If the Department of Community Affairs prevails, the special district will have to pay travel costs to Tallahassee (since venue for all actions will be in Leon County), filing fees, other fees, and the Department's attorney fees.

Other Accountability Requirements

Each special district should check its statutory authority (if applicable) and charter, to find out if it must comply with additional requirements that this handbook did not cover. For a summary of all special district reporting requirements explained throughout this handbook, see Reporting Requirements Summarized and Direct Contacts For Additional Information.

Additional Information

Department of Community Affairs, Special District Information Program

Section 2 - 2: General Financial Requirements
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